ACIT, Chandigarh V. M/s Punjab State Coop. Bank Limited, Chandigarh

ITA 612/CHANDI/2015

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1616 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-11-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 03-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D S SIDHU
• Keywords: Depreciation; Wrong claim; Revised return

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI H.L. KARWA, HONBLE VICE PRESIDENT AND MS. ANNAPURNA MEHROTRA, ACCOUNTANT MEMBER ITA NO. 612/CHD/2015 ASSESSMENT YEAR:2011-12 THE ACIT VS. PUNJAB STATE COOP. BANK LIMITED CIRCLE 2(1), SCO 51-52 CHANDIGARH SECTOR 17-B CHANDIGARH PAN NO. AAAAP0253B (APPELLANT) (RESPONDENT) APPELLANT BY : SH. D.S. SIDHU RESPONDENT BY : SH. M.R. SHARMA DATE OF HEARING : 15/09/2015 DATE OF PRONOUNCEMENT : 04/11/2015 ORDER PER ANNAPURNA MEHROTRA A.M. THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A)- 1 CHD DT. 20/03/2015. 2. THE ONLY ISSUE IN THE PRESENT APPEAL IS REGARDIN G THE ALLOWANCE OF CLAIM OF DEPRECIATION. 3. BRIEF FACTS OF THE CASE ARE THAT FOR THE IMPUGNE D ASSESSMENT YEAR, THE ASSESSEE FILED ITS RETURN OF INCOME, DECLARING AN I NCOME OF RS. 49,19,91,840/-. DURING ASSESSMENT PROCEEDINGS THE ASSESSEE FILED A REVISED COMPUTATION OF INCOME, IN WHICH DEPRECIATION WAS NOT CLAIMED AND T HE TOTAL INCOME WAS COMPUTED AT RS. 49,38,74,380/-. ON BEING ASKED BY T HE AO WHETHER ANY REVISED RETURN HAS BEEN FILED BY THE ASSESSEE THE ASSESSEE DENIED THE SAME. THE AO THEREFORE TREATED THE INCOME FURNISHED BY THE ASSES SEEE DURING ASSESSMENT 2 PROCEEDINGS AT RS. 49,38,74,380/- AS THE TAXABLE IN COME OF THE ASSESSEE AND COMPUTED TAXES THEREON. 4. BEFORE THE LD. CIT(A) THE ASSESSEE PLEADED THAT DEPRECIATION WAS BY MISTAKE OMITTED FROM BEING CLAIMED IN THE REVISED C OMPUTATION CHART FILED BY THE ASSESSEE IN ASSESSMENT PROCEEDINGS. THE ASSESSE E PLEADED THAT THE DEPRECIATION WAS TO BE ALLOWED ON THE BASIS OF ORIG INAL CLAIM OF THE ASSESSEE. LD. CIT(A) ALLOWED THIS CLAIM OF ASSESSEE BY HOLDIN G PARA 6.3 OF HIS ORDER AS FOLLOWS: THE EXPLANATION OF THE APPELLANT REGARDING NOT CL AIMING DEPRECIATION IN THE REVISED COMPUTATION CHART APPEARS TO BE CORRECT. TH E ASSESSING OFFICER HAS ADOPTED INCOME AS PER REVISED COMPUTATION CHART AND SO DEPRECIATION CLAIMED IN THE ORIGINAL RETURN HAS NOT BEEN ALLOWED TO THE APPELLANT, FOR WHICH THE APPELLANT IS STATUTORILY ELIGIBLE. HENCE, THE ASSES SING OFFICER IS DIRECTED TO ALLOW DEPRECIATION AS CLAIMED IN THE ORIGINAL RETURN AFTE R VERIFICATION. 5. AGGRIEVED BY THE SAME, THE REVENUE FILED THE PRE SENT APPEAL BEFORE US TAKING THE FOLLOWING GROUNDS: 1. THE ORDER OF THE LEARNED CIT(A) IS ERRONEOUS & CONT RARY TO FACTS & LAW. 2. THE LD. CIT(A) HAS ERRED IN ADMITTING THE ADDITIONA L GROUND TAKEN BY THE ASSESSEE WHICH IS BASED ON A FALSE CLAIM THAT DEPRE CIATION WAS DISALLOWED BY THE A.O. WHEN NO SUCH DISALLOWANCE HAS BEEN MADE IN THE ASSESSMENT ORDER AND THE DEPRECIATION CLAIMED IN THE REVISED COMPUTATION FILED BY THE ASSESSEE HAS BEEN ACCEPTED BY THE A.O. 3. THE LD. CIT(A) HAS ERRED IN ADMITTING THE ADDITIONA L GROUND TAKEN BY THE ASSESSEE WHICH IS BASED ON A FALSE CLAIM THAT THE A SSESSEE HAD NOT CLAIMED DEPRECIATION IN REVISED COMPUTATION WHEN IN FACT DE PRECIATION HAD BEEN CLAIMED IN THE REVISED COMPUTATION FILED BY ASSESSE E AND SUCH CLAIM HAS BEEN ACCEPTED BY THE A.O. 4. THE LD. CIT(A) HAS ERRED IN LAW BY ACCEPTING THE CL AIM OF THE ASSESSEE THAT IT HAD NOT CLAIMED DEPRECIATION IN THE REVISE D COMPUTATION INADVERTENTLY WHEN THE FACT IS THAT THE ASSESSEE HAD CLAIMED AND WAS ALLOWED DEPRECIATION AMOUNTING TO RS. 72,25,896/- IN THE REVISED COMPUTA TION AS AGAINST DEPRECIATION OF RS. 91,08,442/- CLAIMED IN THE ORIGINAL COMPUTAT ION. 5. THE LD. CIT(A) HAS ERRED IN LAW BY REFERRING THE MA TTER REGARDING ALLOWABILITY OF DEPRECIATION IN THE ORIGINAL COMPUT ATION TO THE ASSESSING OFFICER FOR VERIFICATION WHEN HE SHOULD HAVE HIMSELF EXAMINED A ND REJECTED THE CLAIM OF THE ASSESSEE WHICH IS CLEARLY FALSE AS A BARE PERUSAL O F THE REVISED COMPUTATION REVEALS. 6. THE LD. CIT(A) HAS ERRED IN LAW IN NOT DECIDING THE ISSUE REGARDING ALLOWABILITY OF DEPRECIATION BY REFERRING THE MATTE R BACK TO THE ASSESSING OFFICER FOR VERIFICATION WITHOUT CONSIDERING THE ISSUE RELA TING TO CHANGE IN CLASSIFICATION OF ASSETS UNDER DIFFERENT BLOCKS OF ASSETS. 7. IT IS PRAYED THAT THE ORDER OF THE LD. CIT(A) BE CA NCELLED AND THAT OF THE ASSESSING OFFICER MAY BE RESTORED. 3 8. THE APPELLANT CRAVES TO ADD TO ALTER, OR AMEND ANY GROUNDS OF THE APPEAL RAISED ABOVE AT THE TIME OF THE HEARING. 6. BEFORE US LD. DR ARGUED THAT SINCE THE ASSESSEE HAD ITSELF NOT CLAIMED DEPRECIATION IN ITS REVISED COMPUTATION OF INCOME, THE SAME HAD RIGHTLY NOT BEEN ALLOWED BY THE AO. 7. LD. DR ON THE OTHER HAND RELIED ON THE FINDINGS OF THE LD. CIT(A) AND STATED THAT THE OMISSION OF CLAIM OF DEPRECIATION W AS ONLY A MISTAKE AND THE ASSESSEE IN ANY CASE WAS ENTITLED TO THE CLAIM DEPR ECIATION AS PER ITS ORIGINAL RETURN OF INCOME. 8. AFTER HEARING THE RIVAL SUBMISSIONS AND GOING TH ROUGH THE ORDER OF THE AUTHORITIES BELOW WE FIND THAT THERE IS NO INFIRMIT Y IN THE ORDER OF LD. CIT(A). IT IS NOT IN DISPUTE THAT THE ASSESSEE WAS ENTITLED TO CL AIM DEPRECIATION. THE ONLY ISSUE IS THAT SINCE, THE ASSESSEE OMITTED TO CLAIM THE SAME IN A REVISED COMPUTATION OF INCOME FILED DURING ASSESSMENT PROCE EDINGS, WHETHER THE CLAIM OF DEPRECIATION IS TO BE DISALLOWED. AS PER THE PRO VISIONS OF SECTION 32, EXPLANATION 5, DEPRECIATION IS TO BE ALLOWED WHETHE R OR NOT THE ASSESSEE HAS CLAIMED DEDUCTION OF THE SAME. CLEARLY, THERE IS N O STATUTORY REQUIREMENT TO CLAIM DEPRECIATION IN THE RETURN OF INCOME AND THE SAME IS TO BE ALLOWED EVEN IN THE ABSENCE OF ANY CLAIM. IN THE BACKDROP OF THI S POSITION OF LAW WE FIND, NO MERIT IN THE CLAIM OF THE LD. DR THAT SINCE, THE AS SESSEE HAD NOT CLAIMED DEPRECIATION IN THE REVISED COMPUTATION OF INCOME T HE SAME IS NOT TO BE ALLOWED TO THE ASSESSEE. IT IS PERTINENT TO POINT O UT THAT THE ASSESSEE HAD CLAIMED DEPRECIATION IN ITS ORIGINAL COMPUTATION AN D THE ABSENCE OF THE SAME IN THE REVISED COMPUTATION APPEARS TO BE A MERE MIS TAKE. HAVING SAID SO, IT IS EVIDENT THAT IT IS NOT EVEN A CASE WHERE ASSESSEE H AD NOT CLAIMED DEPRECIATION IN ITS RETURN OF INCOME IT WAS A MERE OMISSION OF C LAIM IN THE COMPUTATION OF INCOME. THEREFORE ALSO, THE DEPRECIATION SHOULD NOT HAVE BEEN DISALLOWED.. WE THEREFORE UPHOLD THE ORDER OF LD. CIT(A) ON THIS GR OUND. THE ASSESSEE IS THEREFORE 4 HELD TO BE ENTITLED TO CLAIM DEPRECIATION AND THE F INDINGS OF THE LD. CIT(A) DIRECTING THE AO TO ALLOW DEPRECIATION AS CLAIMED I N THE ORIGINAL RETURN AFTER VERIFICATION IS UPHELD. 9. THIS GROUND OF APPEAL OF THE REVENUE IS THEREFOR E DISMISSED. 10. THE REVENUE HAS ALSO TAKEN A GROUND THAT THE LD . CIT(A) HAS ERRED IN ADMITTING THE ADDITIONAL GROUND ON THIS ISSUE. 11. WE FIND THAT THE LD. CIT(A) HAS GIVEN A FINDING THAT THE OMISSION OF THE ABOVE GROUND OF APPEAL WAS NOT WILLFUL AND THEREFOR E HE ADMITTED THIS GROUND FOR ADJUDICATION. WE FIND NO REASON TO INTERFERE IN THE ORDER OF LD. CIT(A) IN THIS REGARD AS PER THE PROVISIONS OF SECTION 250(5), THE LD. CIT(A) IS ENTITLED TO ADMIT ANY GROUND OF APPEAL NOT SPECIFIED IN THE GROUNDS O F APPEAL IF HE IS SATISFIED THAT THE OMISSION OF THE GROUND WAS NOT WILLFUL OR UNREASONABLE. IN THE PRESENT CASE, WE FIND THAT THE LD. CIT(A) HAS ACCEPTED THE EXPLANATION OF THE ASSESSEE THAT THE OMISSION OF THE DEPRECIATION CLAIMED IN TH E REVISED COMPUTATION OF INCOME WAS AN MISTAKE. IT LOGICALLY FOLLOWS THAT TH E FAILURE OF THE ASSESSEE TO TAKE UP THIS GROUND OF APPEAL WAS ALSO INADVERTENT AND C OULD NOT HAVE BEEN WILLFUL. THUS, THE LD. CIT(A) WAS RIGHT AND WITHIN HIS POWER S TO ADMIT THIS ADDITIONAL GROUNDS OF APPEAL. 12. THIS GROUND OF APPEAL OF THE REVENUE IS THEREFO RE DISMISSED. 13. THE APPEAL OF THE REVENUE IS THEREBY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 04/11/2015 SD/- SD/- (H.L. KARWA) (ANNAPURNA MEHROTRA) VICE PRESIDENT ACCOUNTANT MEMBER DATED : 04/11/2015 AG COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR